FxWirePro: AUD/USD retraces from session lows, rebound in commodity prices and improving risk support gains

AUD/USD chart - Trading View 

AUD/USD erases early gains and was trading at 0.7260 at around 09:30, up from session lows at 0.7237.

Risk sentiment has improved with the Biden Administration making progress on its budget and infrastructure proposals.

A rebound in commodity prices and improving risk appetite keeps the antipodeans supported. 

That said, rising covid cases across Australia which show no sign of lockdowns ending keep upside limited.

The Reserve Bank of Australia meets on 7th Sept to decide policy. Markets expect the central bank to stick with its decision to start tapering bond buying.

However, given the spread of the Delta variant, the decision on Sept 7th might be a close one.

Analysts expect the RBA will not actually start hiking rates until 2024 given persistent weakness in wages and core inflation.

On the other side, the People's Bank of China (PBOC) increased short-term fund injections into the financial system on Wednesday, by offering 50 billion yuan ($7.72 billion) through seven-day reverse repos.

The move was an effort to soothe market worries over tightening liquidity. In a separate statement posted on late Tuesday, the PBOC said it would auction another 70 billion yuan worth of one-month cash deposits on Friday.

AUD/USD technical bias is turning bullish on the intraday charts. Price action is above 200H MA and the pair is on track to test 21-EMA at 0.7299.

Focus on US Durable Goods Orders due later today and key Jackson Hole Symposium event later in  the week for further impetus.